Eli Lilly's (LLY 2.07%) stock has risen 225% over the past three years. That trounces the S&P 500's (^GSPC 1.18%) gain of 66% over the same span.
If you weren't on board for that ride, you may not want to chase after Eli Lilly, given its lofty 49 price-to-earnings ratio. GLP-1 competitor Novo Nordisk (NVO 1.89%) and medical device maker Medtronic (MDT 0.97%) could be interesting alternatives. Here's why.
Novo Nordisk stumbles into 2026
Novo Nordisk was the first to market with a GLP-1 weight-loss drug. Eli Lilly's GLP-1 offerings were better received by consumers, giving it the edge in this exciting new drug category. However, Novo Nordisk is again leading the way, as it was first to market with a GLP-1 pill. Consumer uptake of the pill was faster than management expected, as well as faster than the company's earlier GLP-1 offerings.
Image source: Getty Images.
The long-term opportunity here is volume, as more and more people take GLP-1 drugs. That said, Wall Street punished Novo Nordisk's stock because of Eli Lilly's success in the GLP-1 space. With the stock down some 66% from its 2024 highs, there's material turnaround appeal in Novo Nordisk's stock if you're willing to take a long-term view. Indeed, the company has warned that earnings in 2026 will be weak but that strong demand for GLP-1 pills will be a long-term growth driver.
NYSE: NVO
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Medtronic is getting focused
Medtronic is one of the world's largest medical device makers. In 2026, it plans to spin off its diabetes business. Although the division has been growing quickly, it has lower margins than the rest of the company's operations. In fact, the company expects the spinoff to be immediately accretive to earnings.
NYSE: MDT
Key Data Points
The big benefit, however, will be longer-term in nature. Essentially, the strength of the company's higher-profit cardiovascular, neuroscience, and medical-surgical businesses will be able to shine through. That will turn Medtronic into a faster-growing business. The stock is still more than 20% below its 2021 highs, so there's material recovery potential here, as well.
Looking to the future
Looking back, Eli Lilly was a big healthcare winner. That doesn't mean that it will remain a winner in the future. The GLP-1 pill catalyst at Novo Nordisk could get it back on track once sales fully ramp up. And Medtronic could unlock its growth machine once it spins off its diabetes division.
